Massive fuel price hike looms: Diesel could surpass R30 mark in May

Motorists are facing another significant blow to their wallets as the latest data suggests a massive fuel price hike is on the horizon for May.

Data released by the Central Energy Fund (CEF) indicates a severe under-recovery across all fuel types. If current trends hold, diesel prices could see a staggering increase of nearly R10 per litre, while petrol is expected to rise by approximately R3 per litre.

Illuminating paraffin, a vital energy source for many low-income households, is also under pressure with a projected increase of R7.58 per litre.

The primary catalyst for these potential increases is the ongoing volatility of Brent crude oil prices. This market instability is largely fueled by escalating geopolitical tensions in the Middle East, which continue to disrupt global supply expectations and drive up costs.

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Frank Blackmore, Lead Economist at KPMG, warns that these adjustments will have a profound impact on the national economy.

"That would push the price of petrol significantly higher than where we started, while diesel could exceed the R30 per litre mark, adding to inflationary pressure," Blackmore noted.

According to Blackmore’s projections, these fuel hikes could raise headline inflation by 1.2 percentage points this month alone, potentially pushing the rate to approximately 4%.

The concern for consumers extends beyond the filling station. Blackmore highlights that the "secondary effects" of high diesel costs will eventually permeate the entire supply chain.

"Producers and industry players who have diesel integrated into their cost structures will pass those costs through to consumers over time," Blackmore explained. "This means the price of any goods requiring transport will rise. For the year, we are now looking at inflation sitting in the high 4% range."